Cvp Analysis

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A Case Method Approach to Teaching Cost-Volume-Profit Analysis Forthcoming in the “Journal of Accounting and Finance” (Fall 2012) Susan Machuga, PhD, CPA University of Hartford 200 Bloomfield Avenue West Hartford CT. 06117 Machuga@hartford.edu Phone: (860) 418-9170 Fax: (860) 768-4398 Submission date: March 30, 2012 A Case Method Approach to Teaching Cost-Volume-Profit Analysis This paper presents a Multi-Disciplinary Case-Method approach to teaching Cost-Volume-Profit (CVP) Analysis allowing students to use their own assumptions to simulate a real-life business startup analysis. The proposed business venture is one of starting a milkshake shack in the island of Hawaii. Students will learn to distinguish between fixed and variable costs, apply some of their own assumptions, and determine whether it would be profitable to open up a new business. A Case Method Approach to Teaching Cost-Volume-Profit Analysis This paper presents a Multi-Disciplinary Case-Method approach to teaching Cost-Volume-Profit (CVP) Analysis allowing students to use their own assumptions to simulate a real-life business startup analysis. The proposed business venture is one of starting a milkshake shack in the island of Hawaii. Students will learn to distinguish between fixed and variable costs, apply some of their own assumptions, and determine whether it would be profitable to open up a new business. INTRODUCTION I present an alternative, more comprehensive teaching approach, for Cost-Volume-Profit (CVP) analysis from that of the commonly used approach which simply teaches students how to use a series of equations to solve various questions related to CVP analysis in which unit selling price, total fixed costs, and unit variable costs are assumed to remain constant (Garrison et al 2010; Choo and Tan, 2010). I use a multi-disciplinary approach in the
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